SB 169-LICENSE PLATES: COUNCIL ON ARTS  4:24:57 PM CHAIR REVAK reconvened the meeting and announced the consideration of SENATE BILL NO. 169, "An Act relating to special request registration plates celebrating the arts; and relating to the Alaska State Council on the Arts." 4:25:35 PM SENATOR GARY STEVENS, Alaska State Legislature, Juneau, Alaska, sponsor of SB 169, stated that he appreciates carrying a bill relating to the Alaska State Council on the Arts (ASCA) because he has always admired the organization and the work it does throughout the state. He related that the council requested this bill to provide stability to its budget structure after complications arose during the last budget cycle. He explained that SB 169 is a housekeeping measure to amend the existing license plate program to allow people who support the arts council to provide it with addition revenue. It also provides a means for legal representation when needed, consistent with the process provided to other state agencies. It holds harmless the ASCA's private funds from the Executive Budget Act. CHAIR REVAK asked Mr. Lamkin to walk through the sectional analysis for SB 169. 4:27:22 PM TIM LAMKIN, Staff, Senator Gary Stevens, Alaska State Legislature, Juneau, Alaska, delivered the sectional analysis for SB 169. He noted that two members of the committee heard and passed the committee substitute from the Senate Education Committee. Sec. 1: AS 28.10.421(a), relating to fees paid to the Division of Motor Vehicles (DMV) for vehicle license plates, allows for an additional fee, set by Alaska State Council on the Arts (ASCA) regulation, and not to exceed $50, when a person chooses a new or replacement ASCA artistic plate. The subsection also provides that these additional fees will be accounted for separately and that the total amount that exceeds the costs of the Artistic License Plate Program may be appropriated to fund the ASCA. MR. LAMKIN advised that the fee that will go to the ASCA is proposed to be $3, but it could be increased to $50 over the long term if there is market demand. Sec. 2: AS 44.27, relating to the ASCA generally, adds a new section (AS 44.27.053) providing that the Attorney General is legal counsel for ASCA, similar to other state agencies, and also allows the ASCA to retain additional legal counsel as needed, subject to the approval of the Attorney General. MR. LAMKIN related that the Senate Education Committee added the common contract language that the attorney general approval of the representation would not be unreasonably withheld. Sec. 3: AS 44.27.055(d), relating to the ASCA managing its affairs, exempts from the purview of the Executive Budget Act those funds received by ASCA from private non-profit foundation partners. MR. LAMKIN summarized that the funds raised privately to support the ASCA cannot be vetoed. Sec. 4: AS 44.27.080(a), relating to an ASCA-sponsored competition for artistic plates design, from being mandatory to being optional, every four years, at the discretion of ASCA. Sec. 5: AS 44.27.080(c), relating to the artistic plate design competition, restores authority for the ASCA to award the artist of the winning design a monetary amount set in regulation, from the funds generated by the artistic plates. This provision was repealed in 2018. Sec. 6: Provides an effective date of July 1, 2020. MR. LAMKIN advised that Senate Education Committee added the effective date at the request of the ASCA. 4:31:57 PM SENATOR WILSON asked if the Department of Motor Vehicles would collect the $30 fee plus the $3 fee that the ASCA adds. MS. LAMKIN confirmed that the DMV would collect the $3 surcharge, which would go directly to the ASCA, and the $30 fee, which goes to the general fund. SENATOR WILSON asked if older ASCA plates in inventory will continue to be available. MR. LAMKIN replied he would defer to the ASCA, but he assumes that just the new plate would be offered. CHAIR REVAK asked Mr. Brown to respond to the question. 4:33:20 PM BENJAMIN BROWN, Chair, Alaska State Council on the Arts, Juneau, Alaska, explained that the idea is that the DMV would issue just one plate at any given time. CHAIR REVAK asked him to provide his testimony. MR. BROWN agreed with the sponsor that SB 169 is mostly a housekeeping measure. He explained that after the ASCA shut down for a period of time last year after the governor vetoed their funding, so the council looked for ways to become more self- sustaining. While it is not possible to raise all of the approximately $700,000 match for the National Endowment for the Arts through earned income, a promising way to come up with a meaningful amount would be to add a small surcharge to the existing Artistic License Plate program. This would not be cost prohibitive to Alaskans who want to lend a financial hand to the ASCA. MR. BROWN agreed with Mr. Lamkin that the bill allows the ASCA, as a public corporation, to work through the Administrative Procedures Act to select the appropriate amount of surcharge that will be used to match the federal National Endowment of the Arts funds and reduce the amount of undesignated general funds the ASCA needs to continue operating. He described that as the most important provision in the bill. It provides an opportunity to encourage visual arts and celebrate the beauty of Alaska while providing meaningful revenue at a time when all state agencies are trying to find ways to be more fiscally sustainable. MR. BROWN opined that Mr. Lamkin ably described the other provisions relating to the attorney general serving as counsel, the ability to hire outside counsel, and the private support exemption from the Executive Budget Act. He said the council requested the Senate Education Committee add the effective date provision to start collecting the surcharge at the start of the next fiscal year to avoid any bookkeeping problems for the administration. 4:37:34 PM SENATOR KAWASAKI asked if the old plates would be retired once a new one was available. MR. BROWN replied people can get new tags for their existing plate, but anyone who wants to buy a license plate could only buy the current plate. 4:38:57 PM SENATOR KAWASAKI asked what happens to the unsold license plates that DMV may have in inventory. MR. BROWN said he would not want to waste either metal or someone's time, but he would defer to the DMV to provide an answer. MR. LAMKIN added his understanding that the DMV keeps some inventory but has a good sense of the demand for these specialty plates and does not order beyond what they expect to sell. He offered to follow up after conferring with the DMV. CHAIR REVAK said he had anticipated an answer from the DMV. 4:41:13 PM SENATOR WILSON asked the customary amount an artist would receive for designing a new license plate. MR. LAMKIN replied the most recent ASCA award to an artist was for $5,000, which is the amount provided in regulation. SENATOR WILSON expressed satisfaction that there are guidelines in regulation for the amount that can be awarded. CHAIR REVAK asked the reason for the change in Section 4 from the council "shall" hold competitions to the council "may" hold competitions. 4:42:40 PM MR. BROWN said after the traumatic experience of not existing for [a couple of months], the council decided that the less mandatory language in the enabling statute, the better. The intent is for young Alaskan artists to be compensated for creating art while monetizing the council's operations. It also helps the council become less reliant on scarce undesignated general funds. 4:44:19 PM SENATOR STEVENS clarified that Mr. Brown meant to say the council did not exist for two months, not two years. 4:45:10 PM CHAIR REVAK opened public testimony on SB 169. Finding none, he closed public testimony. CHAIR REVAK held SB 169 in committee for future consideration.